The Ukraine war has triggered worldwide turmoil in financial markets and raised doubts about the recovery of the global economy. It has also increased economic uncertainty around demand and inflation and created concerns about supply chain disruptions.
One of the more recent casualties is the availability of wooden pallets.
Crucial in the packaging, handling and storage of goods, the pallet sector has already been operating in a challenging market thanks to the supply chain disruption triggered by Covid. Now, a new shortage of wood and rising manufacturing costs are adding an additional strain on the sector.
“In a few months, the price of a single (new) pallet has risen from €7 to €29. They are increasingly difficult to find and more expensive to produce in a context of soaring raw material costs and in particular the price of wood.”
La Chaîne Logistique du Froid
Ukraine is a significant producer of wooden pallets. Before the war, the country exported around 15 million pallets a year to Europe. Now, with workshops closed across the nation, there is a shortage of new products coming to the market.
The conflict and sanctions have also impacted the supply of pallet and packaging wood from Ukraine, Russia and Belarus to western Europe. With the supply chain brought to a halt, wood is now in short supply.
As a result of growing shortages, the industry is now faced with sizeable price hikes in the cost of second-hand pallets.